Woods Equipment Company

About Woods Equipment Company

Folks at Blount International have their work cut out for them. The manufacturer produces cutting chain, guide bars, sprockets, and accessories for chainsaws, concrete-cutting equipment, and lawnmower blades. Blount's lineup is sold under brands Oregon, Carlton, Tiger, and Windsor to outdoor equipment OEMs, including Husqvarna, and the replacement and retail markets. Other subsidiaries supply log splitters, post-hole diggers, and other agriculture add-ons. End users are professionals and consumers engaged in forestry, lawn and garden, farming, and construction activities. The company's manufacturing facilities dot Brazil, Canada, China, and the US. About two-thirds of Blount's sales are made outside the US. In early 2016 it was acquired by private-equity firms American Securities and P2 Capital Partners.

Operations

Blount sells its products across two segments: forestry, lawn, and garden (FLAG), and farm, ranch, and agriculture (FRAG). The former segment represents about 70% of its total sales each year, while the latter accounts for the remainder.

The company also operates a concrete cutting and finishing (CCF) equipment business that is reported within the "corporate and other" category. This business manufactures and markets diamond-cutting chains, assembles and markets concrete cutting chain saws, and purchases other concrete cutting products that are marketed to the construction and utility industries.

Sales and Marketing

The company sells its products through a global sales and distribution network of over 300 distributors, 30,000 dealers, direct sales companies, and mass merchants, which sell to the global forestry, lawn and garden; farm, ranch, and agriculture; and construction products end markets. The company also sells through nearly 100 original equipment manufacturers.

Financial Performance

After posting a decline in 2013, Blount saw its revenues rebound for 2014, increasing 5% to peak at a record-setting $945 million. Profits also skyrocketed over 650% from $5 million in 2013 to $37 million in 2014. Its operating cash flow has fluctuated over the years, rising sharply in 2013, but declining by 15% during 2014.

The historic growth for 2014 was driven by a 5% increase from its FLAG segment due to a rise in demand across most geographic regions, especially South America (increased by 8%) and North America (7%). Its FRAG operations experienced a 3% increase in 2014 due to higher unit sales volumes (led by increased sales of log splitters and tractor attachments) and higher average selling prices across North America.

Blount's surge in profits for 2014 was attributed to the improved revenue coupled with lower expenses related to the impairment of acquired intangible assets along with charges related to restructuring activities.

Strategy

Blount has also fueled its momentum by strategically expanding its product portfolio and customer base through acquisitions. In 2014 the company acquired Arizona-based Pentruder. As part of the transaction, the company became the exclusive distributor of Pentruder high-performance concrete cutting systems in North and South America. Pentruder now operates under Blount's concrete cutting and finishing (CCF) equipment business.